In the past couple of sessions Indian indices have been falling like a pack of cards on the back of bleak global macro economic environment and free falling rupee.

Even in this scenario, broking firm Ambit Capital seems to be betting big on the market and sees the Sensex touching 23000 level by 2013 end.

Head of Equities Saurabh Mukherjea sees the ongoing correction in the market as a buying opportunity. At the current juncture, stocks like Maruti , Cummins , Bharti and Exide offer good risk-reward ratio, so for those willing to take risk can bet on these stocks, he told CNBC-TV18 in an interview.

“Most of our clients have been invested in India for the best part of the last 20 years. Their read is that if you want to make money in India you have to buy at times of distress.”

FMCG stocks can be seen as safe haven investment, but their valuations unreasonable. Ambit has a sell rating on entire space including ITC .

He expects autos, industrials and realty sector to see biggest rallies going ahead. “We will prefer moving to autos and select financials,” he added. From the auto space, Maruti is Ambit’s top pick and sees TVS Motor as a good contra bet now. The broking firm is upbeat on auto ancillary company Exide as its pricing power is likely to be back.

On macros, though India is going through cyclical problems and governance issues, but India growth strong still remains strong, he added. “We may be close to bottom for GDP cycle,” he added.

Below is the verbatim transcript of Saurabh Mukherjea's interview on CNBC-TV18

Q: You have been quite optimistic about the market with targets of 23500 last time. Have you scaled it down?

A: The target has been 23000 for the last year and we are still pushing 23000 out there. This is a tremendous buying opportunity and I am not exaggerating. The bulk of our foreign institutional investors (FIIs) are long-only and a bulk of them is buying.

There are pockets of our client base where there is concern given the state of the currency and the current account deficit (CAD). But most of our clients have invested in India for the last 20 years and according to them if you want to make money in India you have to buy at times of distress. In companies like Maruti Suzuki or Cummins India or Bharti India, if you are not willing to take risk at junctures like this on fundamentally sound businesses, then it is very difficult to make money on these companies.

So the FMCG, pharmaceutical, IT pack, there the joy could be limited beyond some currency gains for pharma and IT. However, there is a whole bunch of names in auto and in industrials, decent companies, good balance sheets available that are at very attractive valuations.

Maruti, Cummins, Exide Industries would be the three names I would be looking at now. So we are suggesting clients that the economy is fundamentally solid, there are problems around CAD and currency which are not going to be resolved in the next 60 days or so. However, to make money in India we have to buy at junctures like this. Otherwise in this illiquid market it is very difficult to make profits when the market itself is on a tear.

Q: The way data is coming in, it seems that the economy has not bottomed out yet, we could be staring at even lower numbers. What gives you the conviction that we are staring at a turnaround anytime soon?

A: There are few points and all depends on how one can read the economic data. I haven't seen any other country where two-three years into an economic downturn, you have a real estate market like the one we have in our country. From my office in Mumbai I get the information that there are six construction cranes on the skyline, the Mumbai real estate registration data. Similarly, for Bangalore the real estate registration data suggests a consistent buying by high networth individuals of properties.

Similarly, real estate funds are not having any trouble raising money from foreign investors. So it is very difficult to see a country where individual balance sheets, retail balance sheets are loaded with gold and real estate. It is very difficult to say that sort of country has its structural economic issue. We have problems with out polity and with our investment cycle but those are cyclical issues every economy goes through.

At this juncture, every single break economy has a Purchasing Managers' Index (PMI) read sub 50. It is not just India, a country supposed to be well governed like China has a PMI read actually lower than ours. So in a context of a global economic cycle we are at a low point in that cycle. We have a problem with our investment cycle and some specific issues around governance which I don't think will be resolved just by election. Those governance issues are more fundamental and will persist with India for some time to come.

At the core of the Indian economy you have strong virile consumer with a strong balance sheet. So strong that you can afford to buy gold by the truck load three years into an economic downturn and have a real estate market which refuses to crack.